(OP here) I tried to explain this in my post here: http://www.danshapiro.com/blog/2010/08/vc-insanity-economics/ http://www.danshapiro.com/blog/2010/08/vc-insan

(OP here) I tried to explain this in my post here: http://www.danshapiro.com/blog/2010/08/vc-insanity-economics/ http://www.danshapiro.com/blog/2010/08/vc-insanity-economics... although rfrey's explanation is excellent and succinct.